Boardwalktech Software : Management's Discussion and Analysis Q4 2024

BOARDWALKTECH SOFTWARE CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

AS AT AND FOR THE THREE MONTHS AND YEAR ENDED MARCH 31, 2024

DATED: JUNE 26, 2024

This Management's Discussion and Analysis ("MD&A") for the three months and year ended March 31, 2024 provides detailed information on the operating activities, performance and financial position of Boardwalktech Software Corp. ("Boardwalk" or the "Company"). This discussion should be read in conjunction with the Company's March 31, 2024 audited consolidated financial statements and accompanying notes. The Company's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are reported in U.S. dollars, unless otherwise stated. The information contained herein is current to June 26, 2024, unless otherwise stated.

The Company's fiscal year commences April 1st of each year and ends on March 31st of the following year. The Company's current fiscal year, which ended on March 31, 2024 is referred to as "current fiscal year", "Fiscal 2024" or similar words. The previous fiscal year, which ended on March 31, 2023, is referred to as "previous fiscal year", "Fiscal 2023" or similar words. The three-month quarter ended March 31, 2024 is referred to as "Q4 Fiscal 2024"and the previous three-month quarter ended December 31, 2023 is referred to as "Q3 Fiscal 2024" and the comparative three-month quarter ended March 31, 2023 is referred to as "Q4 Fiscal 2023".

In this document unless otherwise specified, "we", "us", "our", "Company" and "Boardwalk" all refer to Boardwalktech Software Corp. collectively with its subsidiaries. The content of this MD&A has been approved by the Board of Directors, on the recommendation of its Audit Committee.

CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this MD&A which are not historical facts constitute forward-looking statements or information within the meaning of applicable securities laws ("forward-looking statements"). Such statements include, but are not limited to, statements regarding Boardwalk's projected revenues, gross margins, earnings, growth rates, the impact of new product design wins, market penetration and product plans. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "intend" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause Boardwalk's actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. Accordingly, there can be no assurance that forward-looking statements will prove to be accurate and readers are therefore cautioned not to place undue reliance upon any such forward-looking statements.

Factors that could cause results or events to differ materially from current expectations expressed or implied by forward looking statements contained herein include, but are not limited to: our history of losses and the risks associated with not achieving or sustaining profitability; the Company's dependence on a limited number of customers for a substantial portion of revenues; fluctuating revenue and expense levels arising from changes in customer demand, sales cycles, product mix, average selling prices, cloud hosting costs and timing of product introductions; risks associated with competing against larger and more established companies; competitive risks and pressures from further consolidation amongst competitors, customers, and suppliers; market share risks and timing of revenue recognition associated with product transitions; risks related to intellectual property, including third party licensing or patent infringement claims; the loss of any of the Company's key personnel could seriously harm its business; risks associated with adverse economic conditions; delays in the launch of customer products; price re-negotiations by existing customers; legal proceedings arising from the ordinary course of business; ability to raise needed capital; ongoing liquidity requirements; and other factors discussed in the "Risk Factors" section. All forward-looking statements are qualified in their entirety by this cautionary statement. Boardwalk is providing this information as of the current date and does not undertake any obligation to update any forward-looking statements contained herein as a result of new information, future events or otherwise except as may be required by applicable securities laws.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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Risks relating to the Company include, but are not limited to, the following:

• the Company has a history of losses and may not achieve profitability in the future;
• the Company has historically received a substantial portion of its revenue from a limited number of customers;
• the Company expects its operating results to continue to fluctuate;
• the Company faces intense competition and expects continued market competition in the future;
• assertions by third parties of infringement by Boardwalk of, or of Boardwalk's failure to protect, their intellectual property rights could result in significant costs and cause Boardwalk's operating results to suffer;
• the Company may have difficulty accurately predicting revenue for the purpose of appropriately budgeting and adjusting its expenses.
• the loss of customers could affect the Company's financial returns and future plans;
• the Company's customers may cancel future subscriptions that can adversely impact future recurring revenue;
• the Company may be unable to generate funds required to meet its funding requirements and may need to raise additional funds;
• changes in industry standards or technology could impede the sale of Boardwalk's products;
• the loss of any of the Company's key personnel could seriously harm its business;
• the pattern of customer product ramps as they shift from legacy products to new products based on our more advanced designs could affect both the amount and timing of revenue recognized by the Company;
• the Company's failure to maintain compliance with applicable regulations in certain geographies or other jurisdictions may force it to cease distribution in those areas;
• the majority of the Company's operating expenses are denominated in U.S. dollars; therefore, the Company's earnings are impacted by fluctuations in exchange rates between the U.S. dollar and other currencies; and,
• the Company may be involved in legal proceedings from time to time; arising in the ordinary course of its business and such proceedings may affect the Company's financial position, results of operations or cash flows.

FINANCIAL HIGHLIGHTS

Revenue for Fiscal 2024 totaled $6.0 million compared to $6.5 million for Fiscal 2023, representing an 8% decrease in annual revenue. The portion of revenue from new and recurring SaaS licenses earned in Fiscal 2024 actually increased by 12% year-over-year but was offset by a 60% decline in professional services revenue.

The Company defines annual recurring revenue ("ARR") as the recurring revenue expected based on annual license subscriptions and recurring services recognized in the quarter. ARR is a non-IFRS measure. ARR at March 31, 2024 was $5.6 million, a 3% year-over-year increase versus ARR of $5.5 million at March 31, 2023.

Gross margin for Fiscal 2024 was 89.6%, down from Fiscal 2023's level of 90.6% primarily due to lower revenue levels. The Company expects gross margins to return to prior levels at or about 90% but expects gross margins to fluctuate by quarter.

The Company finished Fiscal 2024 with a stronger balance sheet both in terms of cash balance of $2.2 million and the highest positive working capital level since the end of COVID restrictions in 2021. The Company also secured a three-year, $4.0 million credit facility to further support its growth efforts.

Net loss for Fiscal 2024 was $(3.1) million, $(0.06) per basic and diluted share, which was a 13% improvement versus a net loss of $(3.6) million for Fiscal 2023, $(0.08) per basic and diluted share. Adjusted operating expenses for Fiscal 2024 totaled $7.0 million, a $0.5 million decrease from the $7.5 million of adjusted operating expenses reported for Fiscal 2023. The full impact of the Company's realignment and cost efforts announced in January 2024 are expected to be realized during the upcoming fiscal year.

Non-IFRS net loss for Fiscal 2024 (as defined in the Adjusted EBITDA and Non-IFRS Financial Measures section) was $(1.6) million, $(0.03) per basic and diluted share, versus the $(1.7) million non-IFRS loss for Fiscal 2023, $(0.04) per basic and diluted share. Non-IFRS net loss for Q4 Fiscal 2024 was $(0.4) million, a 13% improvement over the $(0.5) million Non-IFRS net loss for Q4 Fiscal 2023 and 4% sequential improvement over the Non-IFRS net loss for Q3 Fiscal 2024.

Adjusted EBITDA for Fiscal 2024 was $(1.6) million, compared to Adjusted EBITDA of $(1.6) million for Fiscal 2023. However, these annual figures do not show the quarterly progress as the Adjusted EBITDA loss for Q4 Fiscal 2024 was $(0.3) million, a 20% improvement over the $(0.4) million Adjusted EBITDA for Q4 Fiscal 2023 and a 10% sequential improvement over Adjusted EBITDA for Q3 Fiscal 2024.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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OUTLOOK

Guidance for Fiscal Year 2025:

The Company continues to execute on its "land and expand" strategy, as recurring revenue from new SaaS licenses has grown at a compound annual growth rate (CAGR) of 49% over the last three years. Even factoring out the contributions from our Velocity customers, revenue from our core Digital Ledger customers has grown 22% since 2022 on a trailing twelve-month basis. While those growth targets are good considering the Company's limited resources, the Company is targeting and expecting higher growth rates going forward. Despite slower than expected conversions from its sales pipeline since the last earnings report, the Company has seen a pick-up of license agreements in process of execution, with corresponding announcements expected as those license deals commence. The addition of new teaming partners announced during the last months of Fiscal 2024, targeted at the financial services market for our Velocity software product offering, is a positive leading indicator towards those revenue expectations. The Company is also experiencing good initial interest in its new Unity Central product offering, initially targeting solutions for the supply chain based on managing documents, signals and unstructured data. The Unity Central offering will complement and expand our digital ledger solutions delivering solutions to better manage unstructured data with an initial focus in the enterprise supply chain.

While the sales pipeline remains robust and we have not lost any prospective customers, sales conversions in the second half of Fiscal 2024 were lower than projected last summer, led by challenging market headwinds and internal customer issues in calendar year 2024 which has resulted in longer times to close transactions with large, multinational organizations and financial institutions. We believe these factors and delays were not so much related to the sales cycle of customers choosing our product per se, but more customer-centric delays in this "year of efficiency" focus. Further, as evidenced by the revenue reported in the first two quarters of Fiscal 2024, the quarterly fluctuations in professional services revenue came in lower than originally expected. While the Company expects professional service revenue to rebound in absolute dollars over the future quarters, it should remain as a lower percentage of total revenue than historic levels.

Following an internal review which began in the fall of 2023, to improve execution and reduce reliance on slower than expected sales pipeline conversions, the Company implemented steps to improve its balance sheet and reallocate resources from completed development efforts towards sales and marketing efforts. While the total annualize cash savings is projected to exceed $1 million, the reality is that the net realized savings will likely be $500,000 over this next fiscal year, as the Company selectively hires more effective sales and marketing personnel over the next few quarters.

Concurrent with that realignement process, the Company executed four new teaming or partnership agreements with leading IT consultancy and service firms that have existing business relationships with targeted customers in the banking, financial services, CPG and manufacturing markets who would benefit from and license Boardwalk's Digital Ledger, Unity Central and Velocity solutions. These teaming agreements would not be executed if those partners did not anticipate upcoming deals and revenue opportunities where Boardwalktech gets the direct license and the partner get the corresponding services revenue. These agreements provide operating leverage as these partners provide customer access and scale that Boardwalktech could not if it relied on only its own direct sales efforts.

Consequently, the Company does expect to achieve cash breakeven (Adjusted EBITDA) in the next few quarters based on modest revenue growth assumptions and less reliance on large pipeline conversions (than in previous projections), along with the cost savings measures announced in January 2024.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth selected financial information derived from the Company's March 31, 2024 audited consolidated financial statements. The selected quarterly financial information was prepared in accordance with interim financial reporting requirements in a manner consistent with the Company's annual consolidated financial statements.

in thousands of U.S. dollars	for Three-month period ended				Fiscal Year, period ended
except per share amounts	Mar 31,				Dec 31,					Mar 31,				Mar 31,				Mar 31,
	2024	2023		2023		2024	2023
Revenue	$1,423	$1,469		$1,652		$5,972	$6,475
Cost of sales	155	160		161		622	608
Gross Profit	$1,267		$1,309				$1,490			$5,350		$5,867
SG&A expenses *	$1,614		$1,695				$1,921			$6,953		$7,479
Share-based payments	111	292		318		1,007	1,566
Depreciation	79	79		86		321	345
Operating Loss	(537)		(757)			(835)			(2,931)		(3,523)
Severance	$104		$0			$0			$104		$0
Interest oncredit facility	2	-		-		2	-
Imputed interest, lease	24	26		6		73	41
Financing costs & other expenses	104		-			-			104		0
Loss before taxes	($667)		($783)			($841)			(3,110)		(3,564)
Taxes	23	-		20		23	20
Loss for the period	($690)			($783)				($861)				($3,132)			($3,584)
Loss per share, basic and diluted	($0.01)		($0.02)			($0.02)			($0.06)		($0.08)

	in thousands of U.S. dollars	as at March 31,	as at March 31,
	Current Assets	$	2024	$	2023
	Cash	2,232	2,187
	Trade and other receivables		445		1,331
	Prepaid expenses and deposits		281		150
	Total Current aAsets	$	2,958	$	3,669
	Total non-current assets		807		115
	`	$	3,765	$	3,783
	Current liabilities	$		$
	Account payables and accrued liabilities	643	1,229
	Deferred revenue		1,290		3,390
	Deferred compensation		241		-
	Current portion of lease liability		309		127
	Total current liabilities	$	2,483	$	4,746
	Credit facility		2,250		-
	Lease liabilities		622		-
	Total Liabilities	$	5,355	$	4,746
	Shareholders' Equity		(1,590)		(962)
	Total Liabilities and Shareholders' Equity	$	3,765	$	3,783

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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ADJUSTED EBITDA AND NON-IFRS FINANCIAL MEASURES

In addition to disclosing results in accordance with IFRS as issued by the International Accounting Standards Board, the Company also provides Adjusted EBITDA and Non-IFRS financial measures disclosed as a supplement to financial results in order to provide a further understanding of Boardwalk's results and operational performance from management's perspective. In particular, Boardwalk uses Adjusted EBITDA and Non-IFRS financial measures to highlight trends in its core business that may not otherwise be readily apparent solely from IFRS measures. Boardwalk management uses Adjusted EBITDA and Non-IFRS financial measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets, and to assess Boardwalk's ability to meet its future expenditures and working capital requirements. Boardwalk believes that securities analysts, investors and other interested parties frequently use Adjusted EBITDA and Non-IFRS financial measures in the evaluation of publicly traded companies.

Non-IFRS net income (loss) is defined as net income (loss) before share-based payments, depreciation, certain financing and non-recurring or one-time items which may arise from time-to-time.Non-IFRS net income (loss) does not have any standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other companies. Non-IFRS net income (loss) should not be considered in isolation or as a substitute for net income (loss) reported in accordance with IFRS.

Adjusted EBITDA is defined as operating income (loss) for the period (as reported in the consolidated statement of loss and comprehensive loss) less depreciation and share-based payments.

Boardwalk has provided a comparison of net income (loss) to Non-IFRS net income (loss) and Adjusted EBITDA measures in the following tables:

Non-IFRS Net Income (Loss)	for Three-month period ended		Fiscal Year, period ended
in thousands of U.S. dollars	Mar 31,		Dec 31,		Mar 31,		Mar 31,		Mar 31,
except per share amounts	2024	2023	2023	2024	2023
Net Loss for the period	($690)	($783)	($861)	($3,132)	($3,584)
Adjustments:		292	318	1,007	1,566
Share-Based Payments	111
Depreciation	79	79	86	321	345
Share Issue costs	72	83	0	155	0
Rent concessions	0	(28)	0	(28)	0
Severance	104	0	0	104	0
Total Adjustments	366		426		404		1,559		1,910
Non-IFRS Net Loss	($324)		($356)		($457)		($1,574)		($1,674)
Non-IFRS amount per share, basic and diluted:	($0.01)	($0.01)	($0.01)	($0.03)	($0.04)

Adjusted-EBITDA	for Three-month period ended		Fiscal Year, period ended
figures in U.S. dollars, thousands	March 31,		Dec 31,		March 31,		March 31,		March 31,
	2024	2023	2023	2024	2023
Operating Loss for the Period	($537)	($757)	($835)	($2,931)	($3,523)
Add back (deduct)
Depreciation	79	79	86	321	345
Share-Based Payments	111		292		318		1,007		1,566
Adjusted EBITDA	($346)	($386)	($431)	($1,603)	($1,613)

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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OVERVIEW

Our Company

Boardwalk was incorporated pursuant to the Business Corporations Act of British Columbia. The Company operates from locations in the United States and India and provides enterprise software-as-a-service (SaaS) to global customers.

Boardwalk designs and licenses industry-leading enterprise software solutions based upon its unique patented digital ledger technology. The Company has over 50 employees and full-time contractors at its Cupertino, California headquarters and its wholly owned subsidiary in Mumbai, India. Through its extensive data management/database technology expertise, Boardwalk was first to market in 2005 with a proprietary and patented positional, cell data management technology (aka "digital ledger') - what we call "transaction chaining"- which addresses the digital transformation issues companies face when working with multiple parties and exchanging information in real-time. The Company's solutions resolve two enterprise business problems - connecting multiple users in the enterprise value chain to improve planning and results and the alignment of data from various/multiple enterprise systems of record used in planning and information exchange processes. Boardwalk's unique technology allows multiple users secure simultaneous access to the same data in a relational database environment which supports concurrent access to record objects while being edited. Another key enterprise problem that is solved with Boardwalk's technology is the chaining of transactions in a database to support provenance and immutable versioning and change management/change history. Concurrent with the Company's initial go-to-market activities, a patent was filed to protect the IP associated with versioned sharing, consolidating, and reporting enterprise information. Also, in 2014 the Company applied for a patent to protect the IP associated with cell-based data management and this patent was issued in September 2018 which coincides with an existing patent issued July 2005 for managing time-based data at the cell or atomic unit level. Boardwalk's revenue comes primarily from new and recurring license subscription agreements, maintenance, and service contracts. Boardwalk's customers include over 20 companies in the Global 1000 / Fortune 500.

On June 11, 2018, Boardwalk began trading on the TSX Venture Exchange under the symbol 'BWLK'; and on November 13, 2019, Boardwalk began trading on the OTC Markets Group/OTCQB under the symbol "BWLKF".

Products and Solutions

The Boardwalk Digital Ledger enterprise platform is a complete enterprise platform that resolves trust and collaboration issues companies face when working with multiple parties, which enables customers to automate manual business processes and turn them into enterprise "digital" applications using our patented digital ledger data management technology. The Boardwalk Digital Ledger platform can be used to build and maintain applications with multiple internal or external users working in Excel, a web form, or mobile environment as the user interface. The Company's software supports a dynamic, cell-based/atomic unit smart contract and machine learning-enabled information exchange that combines Boardwalk's temporal data management and enterprise integration environment with digital ledger-based trust and validation capabilities. The result is a private permissioned enterprise data management environment that supports time-basedmulti-party workflow transactions and consensus models for automating previously established manual-based processes and turning them into connected digital applications. The Company has developed two solutions that run on the core Boardwalk Digital Ledger technology including Boardwalk Velocity which is focused on the risk management and compliance within the financial services sector and Unity Central which is targeted at improving enterprise supply chain visibility and order execution fulfillment metrics.

Growth Strategy

Boardwalk's objective is to be the leading provider of private permissioned digital ledger solutions for global enterprise customers of any size. Elements key to this strategy include:

• expand our network of direct sales people;
• expand our network of teaming partners and reseller sales channels;
• broader adoption of Boardwalk's solutions by new markets and new customers;
• greater penetration of our existing customer base;
• introduction of new features and capabilities including digital predictive analytics;
• extending our digital ledger technology into an end-to-end operating system solution; and,
• delivering high ROI industry solutions like Velocity and Unity Central.

Sales and Distribution

Boardwalk primarily uses a direct sales model where the Boardwalk Digital Ledger enterprise platform creates a unique go-to-market opportunity for the Boardwalk solution. For direct sales, the Company uses regional sales

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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representatives paired with a Sales Development Representative (SDR) who will guide lead development, with sales representatives on a standard back-end weighted commission plan while the SDR will have a base salary plus variable compensation. Boardwalk is also growing its partner sales ecosystem by recruiting new teaming partners that can build and manage solutions for their clients with a focus in the financial services area leveraging the Boardwalk Velocity for financial services customers running on the Boardwalk Digital Ledger platform. Deployment and professional services for direct sales Boardwalk customers are handled by Boardwalk professional services group while deployment and professional services for teaming partner sales are mainly handled by the partner.

Boardwalk offers the Boardwalk Digital Ledger enterprise platform on an annual subscription basis, with pricing built around multiple digital applications and scale/size of data. Boardwalk engages enterprise clients with an annual subscription for the platform and associated applications and all platform capabilities are included such as:

• Boardwalk Digital Ledger Server;
• Boardwalk Application Design Studio;
• Boardwalk Integration Framework;
• Boardwalk Smart Contract engine;
• Boardwalk APIs;
• Boardwalk Virtual Machines (Nodes);
• Boardwalk Velocity product; and
• Boardwalk Unity Central product.

CORPORATE DEVELOPMENTS

• On June 1, 2023, the Company announced that it added another new customer (Nintex) to its list of growing clients while securing a fourth license with an existing global customer (Estee Lauder), with incremental revenue from these contracts is expected to exceed $200,000 in the next twelve months, over $100,000 of recurring revenue in the first year.
• On August 29, 2023, the Company announced results of its Annual and Special Meeting, where shareholders elected all proposed Directors, appointed MNP LLP as auditors of the Company and approved an amendment to refresh the existing Equity Incentive Plan.
• On October 2, 2023, Boardwalktech and Hexaware announced a teaming agreement for a partnership targeting the banking and financial services customers to drive risk management, compliance, and process improvement.
• On October 26, 2023, LTIMindtree announced it had partnered with Boardwalktech to market Boardwalk's Velocity solution to improve data governance and compliance for banking and financial services clients
• On November 27, 2023, the Company announced it had extended and expanded its commercial engagement with a Fortune 50 technology company for supply chain management, including the execution of its first long- term license with Boardwalk, following an ROI analysis by the customer. This is expected to be the first of several phases/licenses to improve the customer's supply chain execution.
• On December 28, 2023, the Company closed the initial tranche of its Listed Issuer Financing Exemption ("LIFE") offering and concurrent non-brokered private placement, for 7,015,353 Units at CAD $0.30 per Unit a for gross proceeds of $1,590,738 (CAD$2,104,606), pursuant to the National Instrument 45-106 - Prospectus Exemptions ("NI 45-106"). Each Unit included one common share purchase warrant at a price of CAD$0.50 per common share for a period of 36 months from the closing date. Insiders of the Company participated in the Offering for approximately CAD$53,000.
• On January 16, 2024, the Company announced it had expanded commercial agreements with three existing customers, including existing Digital Ledger customer Sekisui Chemical who signed a license for Boardwalk's new Unity Central application for supply chain solution
• Also on January 16, 2024, the Company announced it had executed steps to realign its internal resources with a focus on achieving overall profitability, without compromising sales growth, to generate approximately US$1,000,000 in annual cost savings.
• On February 26, 2024, the Company closed the second tranche of its upsized LIFE offering and non-brokered private placement, of which 473,400 Units were subscribed at CAD $0.30 per Unit and 32,825 Units were subscribed by an Insider of the Company at US$0.22 per Unit, for aggregate gross proceeds of $112,303 (CAD $151,868).

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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• On March 28, 2024, Boardwalktech secured a US$4.0 Million Credit Facility with Celtic Bank to provide available growth funds.
• On April 8, 2024, Boardwalktech announced it had signed a strategic agreement with Tata Consultancy Services (TCS), one of the world's largest IT services and consulting companies with operations in 46 countries and over 615,000 employees, to teaming with Boardwalktech to engage customers in financial services market for the Boardwalk Velocity product, used to rapidly remediate and transform Excel and Access based End User Computing ("EUC") environments into a compliant, auditable, and scalable solution.
• On May 9, 2024 the Company announced it had added Jay Cherrie to its corporate Advisory Board and as a business development asset. Mr. Cherrie's career has included senior executive roles including Global Industry Lead (Financial Services) for Appian Corporation, Chief Technology Officer for First Republic Bank, and led the technology strategy department for Charles Schwab Bank. As the Company continues to expand its presence in the financial services sector, Mr. Cherrie's expertise and vast relationships will prove to be highly valuable for the Company and its shareholders.

CURRENT PERIOD OPERATING RESULTS

Revenue

	for Three-month period ended			Fiscal Year, ended
in thousands of U.S. dollars	Mar 31,		Dec 31,		Mar 31,			Mar 31,			Mar 31,
	2024	2023	2023	2024	2023
SaaS License (New and Renewals)	$1,265	$1,270	$1,120	$4,970	$4,411
Legacy (Hosting and Maintenance)	73	72	101	344	411
Software Subscriptions and Service	$1,338		$1,342		$1,221			$5,314			$4,823
Professional Services	85	127	431		658		1,652
Total Revenue	$1,423	$1,469	$1,652	$5,972	$6,475

Boardwalk derives its revenues from two sources: (1) recurring software subscription revenues (SaaS), which are derived from customer licenses for a right to access the Company's cloud services, certain hosting services for dedicated servers, and from customers paying for additional services beyond the standard support that is included in the basic subscription fees; and (2) related professional services such as consulting, application development, quality assurance (QA), application delivery, and training. New revenue is defined as newly signed contracts during the reporting period for license subscriptions, while recurring or renewal revenue are revenue streams that have been extended from previous periods.

Q4 Fiscal 2024 compared to Q4 Fiscal 2023

Total revenue for Q4 Fiscal 2024 was $1.42 million, a 14% decrease from $1.65 million of revenue for Q4 Fiscal 2023, primarily due to a 80% decline in professional services revenue plus a 27% drop in legacy contract revenue. This offset a 13% increase in SaaS License revenue, which was more important given its relative size (89% of total revenue) and recurring revenue nature.

Q4 Fiscal 2024 compared to Q3 Fiscal 2024

Total revenue for Q4 Fiscal 2024 was $1.42 million, a 3% sequential decrease from $1.47 million of revenue for Q3 Fiscal 2024, due primarily to flat SaaS revenue offset by a 33% decrease in professional services revenue which tends to fluctuate on a quarterly basis.

Fiscal 2024 Year compared to Fiscal 2023 Year

Revenue for Fiscal 2024 was $5.97 million, an 8% decrease over $6.47 million for Fiscal 2023. While SaaS revenue grew 13% year-over-year, this was offset by a $1.0 million decrease (60% year-over-year) in professional services revenue, compounded by a smaller 13% decrease in legacy revenue.

While the Company does expect a continued revenue contribution from professional services, which is expected to rebound from current levels and grow in absolute dollars, professional services revenue is expected to remain as a lower percentage of total revenue and may fluctuate on a quarter-by-quarter basis, as evidenced by recently reported quarters. The Company's primary focus remains on growing recurring revenue.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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Revenue Derived from Major Customers

Based on information from our direct and reseller sales, our customers representing greater than 10% of our revenue for the periods are:

	for Three-month period ended	Fiscal Year, period ended
	Mar 31,		Dec 31,	Mar 31,	Mar 31,	Mar 31,
	2024	2023	2023	2024	2023
Customer A	28.0%		28.1%	32.0%	30.0%	32.5%
Customer B	39.5%	38.3%	29.0%	37.7%	27.7%
				78.8%	82.2%	79.8%
Top 5	82.8%		81.5%
Top 10	91.4%	90.3%	88.8%	91.1%	89.4%

The Company's quarterly revenues can be impacted by and fluctuate due to the timing and frequency of new and existing customers. While we currently receive a substantial portion of our revenue from a limited number of customers, we expect our customer concentration to continue to decline in the future.

Gross Margin

Our revenue, cost of sales, and gross margin for the fiscal periods indicated are as follows:

	for Three-month period ended			Fiscal Year, period ended
thousands of U.S. dollars	Mar 31,			Dec 31,			Mar 31,			Mar 31,	Mar 31,
	2024	2023	2023	2024	2023
Revenue	$1,423	$1,469	$1,652	$5,972	$6,475
Cost of Sales	155		160		161		622	608
Gross Margin $	$1,267		$1,309		$1,490		$5,350	$5,867
Gross Margin %	89.1%	89.1%	90.2%	89.6%	90.6%

Q4 Fiscal 2024 compared to Q4 Fiscal 2023

Gross margin for Q4 Fiscal 2024 was 89.1%, a 1.1%-point increase from 90.2% for Q4 Fiscal 2023, due to lower revenue levels.

Q4 Fiscal 2024 compared to Q3 Fiscal 2024

Gross margin for Q4 Fiscal 2024 was 89.1%, unchanged from Q3 Fiscal 2024.

Fiscal 2024 Year compared to Fiscal 2023 Year

Gross margin for Fiscal 2024 was 89.6% compared to 90.6% for Fiscal 2023, due to lower revenue levels.

The Company expects gross margins to return to prior levels at or about 90% but expects gross margins to fluctuate by quarter. The Company intends to make higher investments with its hosting sub-processor to support further growth, especially with deployment of Unity Central. That said, the Company expects gross margins in future quarters to increase as revenue grows, but the impact is likely to fluctuate period-to-period due to a variety of factors, including product mix.

Operating Expenses

The following table provides an analysis of the Company's total operating expenses plus adjusted operating expenses which exclude non-cashshare-based compensation expenses, as a percentage of total revenue. The analysis following the table will primarily focus on the adjusted operating expenses for the respective periods.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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	for Three-month period ended	Fiscal Year, period ended
figures in U.S. dollars, thousands	Mar 31,	Dec 31,	Mar 31,	Mar 31,	Mar 31,
	2024	2023	2023	2024	2023
Total Operating Expenses*	$1,804	$2,066	$2,325	$8,281	$9,390
Total Adjusted Operating Expenses**	$1,614	$1,695	$1,921	$6,953	$7,479

* Total Operating Expenses include the amortization of revenue contract costs.

** Total Adjusted Operating Expenses exclude non-cashshare-based payment expenses and depreciation.

Boardwalktech Software Corp. Management Discussion and Analysis - March 31, 2024

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